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This really is a super dingoo, the original having an ingenics mips processor, 320x240 2d only. IMHO the system still should have doubled the screen resolution and used a larger lcd. Some PC games from the 90s that have SDL ports don't run well at 320x240. This includes games like (but not limited to) lgeneral and jagged alliance 2 which run just fine on mobile cpus and could be adapted to console controls.

The GPU is part of the jz4770 SoC we are using. We had a 256 -> 512MB RAM upgrade mainly because that was largely requested by people ever since our KS project starter. Personally I think 256MB RAM is enough, but I guess it's the today world where bigger numbers == more sales.

This is solely a personal preference, so I won't comment on that.

based on my experience with the rpi and allwinner a10 the gpu needs to be hard assigned some substantial dedicated memory region which can take potentially 128MB ram or so. I'm not sure how the vivante handles this. Also I'm running full 19x12 x on the a10 so losing that much ram hurts a bit.

The thing is, scaling is better done when you have a much bigger resolution than the original console.

If you have a screen that has 1.5x the resolution, it's not gonna work out great, because you can't paint 0.5 pixels. You can interpolate, or do something else, but having a better resolution would definitely result in clearer graphics. But it would also increase the hw requirements and price.

The device already exists. There was a small batch made for early adopters. The kickstarter exists in order to make full production runs possible so that more than just 150 people can get one.
I paid $120 USD for mine. The kickstarter has a $130 contribution level that gets you the device and some other goodies.